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10/14/2013

McAuliffe chose not to disclose Caramadre investment

Former DNC Chairman Terry McAuliffe, the current Democratic nominee for Governor of Virginia, chose not disclose his investment into an insurance scheme run by a businessman who was stealing the identities of terminally ill patients on his Virginia Board of Elections Statement of Economic Interest during his 2009 run for Governor.

According to his spokesman Josh Schwerin, McAuliffe invested $33,000 into the annuity system from which he received $80,000 back. Last week McAuliffe donated $47,000 to the American Cancer Society, the equivalent of the profit he made from the short term investment. (McAuliffe also donated an additional $27,000 which was the equivalent of campaign donations received from Caramadre)

In a letter to the Chairman of the State Board of Elections, Republican Party of Virginia Chair Pat Mullins asks for an explanation for the difference between the check in the indictment and the level of profit McAuliffe claims to have received.

"Either McAuliffe invested or profited more than he has admitted, or he must
have had a profit-sharing agreement or investment pooling
arrangement with Caramadre that covers the remainder of that check," wrote Mullins.
"Such an agreement is effectively a partnership, security, or so-called
death-put bond and therefore would necessitate SEI disclosure."

Mullins does not have any concrete evidence that there is something amiss with the disclosure beyond the discrepancies in the indictment amount and the amount McAuliffe donated to charity, but he offers the BOE some potential explanations that, not surprisingly, would put McAuliffe in violation of the State's ethics laws.

McAuliffe's team remains firm that the candidate was not required to disclose the investment in 2008. They have said from the beginning that he was duped by Caramadre.

"Terry was one of
hundreds of passive investors several years ago and had no idea about the
allegations against the defendant - who, at the time, was widely respected by
business leaders and elected officials," Schwerin said last week. "The allegations are horrible and
he never would have invested if he knew he was being deceived."

"The accountants who prepared and the lawyers who reviewed Terry's SEI
confirmed that everything is listed accurately," he said. "Its obvious why Ken
Cuccinelli would make another false charge: He infamously failed to
disclose
stock and lavish gifts from a company and its CEO that his office was
supposed to be pursuing for unpaid taxes but instead let off the hook. "